In today’s briefing:
- Haidilao’s Spin-Off of Super Hi: Index Implications
- LG Energy: ESOP Lockup Release (3.5% of SO) & Contrarian Approach Targeting NPS
- Tyro Payments (TYR AU): Potentia Returns with a A$1.60 Offer
- Merger Arb Mondays (12 Dec) – Nitro, Tyro, Bigtincan, Warrego, Genex, Elmo, Golden Energy
- Potentia Bumps But Tyro Shuts Down Talks
Haidilao’s Spin-Off of Super Hi: Index Implications
- Haidilao (6862 HK) intends to spin-off its 90% holding in Super Hi International Holding (SHI HK) with an ex-date of 16 December.
- Super Hi International Holding (SHI HK) will be deleted from the Hong Kong Hang Seng Index and Hang Seng China Enterprises Index at the close on listing day.
- There could be nationality changes and selling from MSCI and FTSE trackers as well, though the timing is uncertain at this point.
LG Energy: ESOP Lockup Release (3.5% of SO) & Contrarian Approach Targeting NPS
- The ESOP’s 3.5% stake will be released on January 27. Considering the extremely tight flow situation, this is by no means small. 3.48% is 20 times the recent ADTV.
- NPS will likely move toward a minimum stake of 6% again for LG Energy, irrespective of LG Energy’s current valuation, despite its recent selling.
- We should consider the possibility that NPS will contrarily utilize this ESOP lockup release, and we should also design a contrarian position for this lockup release.
Tyro Payments (TYR AU): Potentia Returns with a A$1.60 Offer
- The AFR reports that Potentia has increased its offer for Tyro Payments (TYR AU) by 26.0% from A$1.27 to A$1.60 per share, a 62.4% premium to the undisturbed price.
- The revised offer remains light and likely to be rejected again by the Board. Grok’s get-out clause with Potentia now sets the floor price of a competing bid at A$1.85.
- Potentia’s revised bid is the catalyst for the other rumoured suitors (Westpac Banking (WBC AU) and Moneris) to get their act together. A competing offer of around A$2.00 is possible.
Merger Arb Mondays (12 Dec) – Nitro, Tyro, Bigtincan, Warrego, Genex, Elmo, Golden Energy
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Genex Power Ltd (GNX AU), Bigtincan Holdings Ltd (BTH AU), Golden Energy & Resources (GER SP), Origin Energy.
- Lowest spreads Nitro Software Ltd (NTO AU), Warrego Energy (WGO AU), Chip Eng Seng Corp (CHIP SP), Uzabase Inc (3966 JP), Elmo Software (ELO AU), OZ Minerals Ltd (OZL AU).
Potentia Bumps But Tyro Shuts Down Talks
- Potentia has increased its indicative proposal for Tyro Payments (TYR AU) to A$1.60/share from A$1.27/share. Grok, holding 12.5% of shares out, remains supportive.
- However, Tyro’s board believes the revised terms remain below what is considered fair, and has ceased all discussions.
- Separately, Westpac has decided not to submit an Offer. After conducting due diligence. Shares are down 19.5% as I type.
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